The Australian share market is marginally lower at midday, with declines in mining heavyweights like BHP and Fortescue Metals Group on weaker metals prices. And in the minutes from its August board meeting the Reserve Bank of Australia says it will raise interest rates if the economy continues to recover as forecast, saying the economy is faring better than expected and further cuts in rates is unlikely.
The S&P/ASX200 index is down 5 points at 4,383 and on the futures market the SPI 200’s down 14 points.
To business news at midday: National Australia Bank Ltd (ASX:NAB) says it has agreed to purchase the mortgage management business of Challenger Financial Services Group Ltd (ASX:CGF) for $385 million. The purchase includes Challenger’s PLAN, Choice and FAST mortgage aggregator businesses and Challenger’s multi-brand ‘white label’ product capability. NAB will also acquire $4 billion of residential mortgages and a 17.5 per cent stake in listed mortgage company Homeloans, with the option of increasing to 41 per cent subject to shareholder approval. NAB says the acquisition is expected to be earnings and return on equity accretive in the first year. NAB shares fell 0.18 per cent to $27.03.
Oil and gas producer Santos Ltd (ASX:STO) has sold 60 per cent of its assets in the Bonaparte Basin to GDF SUEZ for up to US$370 million. The assets include Petrel, Tern and Frigate gas fields in the Bonaparte Basin. Santos also announced plans to develop a floating LNG project in the Bonaparte Basin with GDF SUEZ with a planned capacity of 2 million tonnes of LNG per annum. Santos says GDF SUEZ will pay US$200 million cash and a further US$170 million to be paid upon final investment decision on the floating LNG project. Santos shares gained 1.79 per cent to $14.76.
Turning now to market indices: The best performing sector at midday is the Industrials index up 18 points to 3,495. Shares in Monadelphous Group up 6.54 per cent at $12.05. Shares in United Group and Downer EDI are also stronger at noon.
One of the worst performing sectors at midday is the Consumer Discretionary index, down 7 points at 1,432. Shares in APN News & Media down 3.39 per cent to $1.71. Shares in Aristocrat Leisure and the Pacific Brands are also lower at noon.
Looking to New Zealand and the NZSX50 is 16 points lower. Taking a look at the top five stocks by value on the NZSX50: Fletcher Building heads the list, stock up 1.05 per cent at $7.72, followed by Telecom of New Zealand, Sky City, Fisher & Paykel Appliances and Tower.
To gold and the dollar: Gold is currently trading at $938.60 US an ounce and the Aussie dollar is trading at 82.54 US cents.
